With all the talk of federal student loans and private loans, subsidized loans and unsubsidized loans, and parent PLUS loans which comes up when talk turns to college and financial aid packages, students and their parents alike sometimes overlook the option of receiving grants. Grants are more like scholarships than loans, as they do not have to be paid back at any time. Here follows a discussion of one of the most well-known kinds of grants, the Pell Grant and the Federal Pell Grant Program.

Pell Grants are a viable and very helpful option for those undergraduates – and some graduate students – who comes from low-income backgrounds. There are over five thousand institutions in the United States which accept Pell Grants as a form of payment for any and all educational needs. The Expected Family Contribution, or EFC, determines how much a Pell Grant may amount to, as does the cost of attendance to a student’s university of choice. Furthermore, the student must remain in that institution for at least one full academic school year.

As with most financial aid, the Free Application for Federal Student Aid, or FAFSA, is the tool used to determine what a student’s expected family contribution will be, to further determine the amount of a student’s Pell Grant. FAFSA uses a standard formula to do this, which consists of the student’s income and assets if that student is an independent student or, if the student is dependent, then it focuses on the parents’ income and assets instead. As well, FAFSA consider the size of the student’s household and the number of family members within it, minus the parents, who are also attending college. The expected family income comes down to the percentage of a family’s net worth and a percentage of their net assets. There are different formulas, depending on whether or not a student is dependent, or independent without dependents of his or her own, or independent with dependents of his or her own.

Federal Pell Grants apply to students which either have not completed a bachelor program anywhere else or which are participating in certain, approved post baccalaureate degrees. In that case, the program must ultimately lead to the student receiving a teaching certificate or a teaching license. Federal Pell Grants are direct grants, which mean that they are issued directly from participating colleges and universities.

These participating colleges and universities are required to pay the student the amount of his or her Pell Grant in one of several different ways. The institution must either pay the student directly using, usually, a check, credit it the amount to the student’s account within the college or university, or use a combination of both of these payment methods. The institution must do this at least once per school term, whether those terms are defined as semesters, trimesters, or quarters. If a college or university does not have a closely defined method for paying students the amount of their Pell Grants, then they must do so in some way at least two times through the entirety of an academic year.

Author: Gary Marjani
Article Source: EzineArticles.com
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